Portions of the intelligencia – typified by Google’s Ray Kurzweil – foresee AI, or Artificial General Intelligence (AGI) bringing good news, perhaps even transcendence for members of the Olde Race of bio-organic humanity 1.0.

Others, such as Stephen Hawking and Francis Fukayama, warn that the arrival of sapient, or super- sapient machinery may bring an end to our species – or at least its relevance on the cosmic stage – a potentiality evoked in many a lurid Hollywood film.

Taking middle ground, SpaceX/Tesla entrepreneur Elon Musk has joined with YCombinator founder Sam Altman to establish OpenAI, an endeavor that aims to keep artificial intelligence research – and its products – accountable by maximizing transparency and accountability.

In fact, the panoply of dangers and opportunities may depend on which of half a dozen paths to AI wind up bearing fruit first. Can AI be designed from scratch, via logic, like IBM’s Watson? In that case we might use “laws” like Asimov predicted, to try to keep control. But there are five other general approaches and the lesson when you study them is that “control” just may not be in the cards.

Why are you a proponent of radical transparency, and do you believe that our world is moving in that direction?

A great many modern citizens are rightfully worried about Big Brother. Some fear tyranny coming from snooty academics and faceless government bureaucrats. Others see Orwellian despots arising from conniving aristocrats and faceless corporations. They are all right to worry! Because across 6000 years, only rarely was something other than feudalism or dictatorship tried. Our experiment has been by far the most successful of those exceptions and we should study why.

We did not achieve this by hiding. Those who fret that governments and corporations and the rich will know too much about us — these folks are right to worry, but they reach the wrong conclusion. We will never successfully hide from elites. It never happened and never will. “Encryption” and other romantic fantasies never work for very long. But there is another approach. Not to hide, but to aggressively strip all elites naked enough to supervise them and hold them accountable. We may not be able to stop them from knowing about us. But we can still deter them from doing bad things to us.

That is how we got our current freedom, by answering surveillance with sousveillance, or supervising authority. Proof of this is the spread of video and cell phone cameras on our streets, which are cornering abuses by authorities and year by year making it harder for them to do bad things. It’s not perfect. It never will be. But the Moore’s Law of Cameras – (sometimes called “Brin’s Corollary to Moore’s Law” I’m told) – seems to be providing citizens with a Great Equalizer, even better than the old Colt 45. This runs diametrically opposite to the Hollywood lesson that technology never works in favor of citizenship. It can and it does.

In any event, the spread of cameras – faster, better, cheaper, more mobile, and vastly more numerous – cannot be stopped. If the elites monopolize this light, we will have Big Brother. But if citizens grab the light, then BB hasn’t a chance.

What are your biggest concerns surrounding developments in artificial intelligence, if any?

Anything done in secret is more likely to result in terrible errors. Secrecy is the underlying mistake that makes every innovation go wrong, in Michael Crichton novels and films! If AI happens in the open, then errors and flaws may be discovered in time… perhaps by other, wary AIs!

Hence, the branch of AI research I fear most is High Frequency Trading (HFT) programs. Wall Street firms have poured more money into this particular realm of AI research than is spent by all of the top universities, combined. Notably, HFT systems are designed in utter secrecy, evading normal feedback loops of scientific criticism and peer-review. Moreover the ethos designed into these mostly unsupervised systems is inherently parasitical, predatory, amoral (at-best) and insatiable.

Not only are they a potential disaster, waiting to happen… they can only possibly lead to disaster. No other outcome is even remotely plausible.

Why do some people fear AI? Is some amount of caution called for?

We fear that advanced, super-intelligent and powerful entities will do to us what human high achievers always did in the past. They took over our tribes, nations and so on, making themselves kings and lords and priests and tyrants, bossing over us and limiting the potential of those below. Adam Smith wrote that such inherited oligarchies were always far deadlier enemies of creative and competitive, flat-open-fair enterprise than government civil servants can ever be.

Especially, because they suppressed criticism, those feudal kings and lords became very, very bad rulers, performing horrifically stupid statecraft while deeming themselves to be so smart. It’s no accident that human civilization only started taking off when we discovered tricks for preventing that failure mode… for keeping things flat-open-fair-competitive.

If new AI minds truly are super intelligent, then they will see what a mistake it would be to emulate that hoary old pattern. What a blunder, if they copy the approach used by puerile-dopey human lords. In my novel EXISTENCE, I explore how AI might choose to take a very different approach than we have seen portrayed in real life or in films.

Now, if only the new AI overlords will read what I wrote, before deciding…

David Brin is an astrophysicist whose international best-selling novels include The Postman, Earth, and recently Existence. His nonfiction book about the information age – The Transparent Society – won the Freedom of Speech Award of the American Library Association.

]]>https://gigaom.com/2017/01/02/four-questions-for-david-brin/feed/1SpaceX will not attempt rocket landing due to rough seashttps://gigaom.com/2015/02/11/spacex-will-not-attempt-rocket-landing-due-to-rough-seas/
Wed, 11 Feb 2015 22:01:39 +0000http://gigaom.com/?p=914320SpaceX has decided against attempting to land its Falcon 9 rocket today, though the launch is still a go. The rocket launch is currently planned for 3:03 p.m. PT, when SpaceX will deliver NASA’s DISCOVR satellite to orbit. The rocket will then fall back to Earth and crash into the ocean, as is the common practice, instead of trying to land on a ship off the coast of Florida, where three-story waves have created dangerous conditions. Today was the last possible day to pair the DISCOVR launch with the Falcon 9 landing, as pushing the launch another day would require alterations to DISCOVR’s path. SpaceX attempted a Falcon 9 landing in January, but failed.
]]>Elon Musk makes peace with U.S. Air Force over satellite contractshttps://gigaom.com/2015/01/23/musk-makes-peace-with-u-s-air-force-over-satellite-contracts/
https://gigaom.com/2015/01/23/musk-makes-peace-with-u-s-air-force-over-satellite-contracts/#commentsFri, 23 Jan 2015 23:53:57 +0000http://gigaom.com/?p=909455In a busy year where he retooled his Tesla fleet and launched reusable rockets, Elon Musk also found time to pick a major fight with the defense industry: he sued the Air Force last April, claiming his company SpaceX had been wrongfully shut out from lucrative contracts to launch satellites.

According to Musk, the Air Force had breached procurement policies by giving an exclusive deal to a consortium run by Lockheed Martin and Boeing without giving [company]SpaceX[/company] the time to navigate a complex certification process.

The contract in question, which involves sending up 36 rockets to deliver satellites and other payloads, is worth billions of dollars with Musk claiming that SpaceX can do it far cheaper than what the incumbents are bidding. Musk has also made provocative comments about the cozy nature of defense contracting:

“Essentially we’re asking them to award a contract to a company where they are probably not going to get a job, against a company where their friends are. So they’ve got to go against their friends, and their future retirement program. This is a difficult thing to expect,” he told Bloomberg.

Now, however, he appears to have won at least a partial concession. In a Friday news release, SpaceX said it is dropping the lawsuit as a result of the Air Force improving the competitive landscape for the Evolved Expendable Launch Vehicle program.

“The Air Force also has expanded the number of competitive opportunities for launch services under the EELV program while honoring existing contractual obligations,” the release added.

The resolution comes at a time that SpaceX appears to have made major progress in developing reusable rockets and booster stages, which could significantly lower the cost of sending objects and people into space.

]]>https://gigaom.com/2015/01/23/musk-makes-peace-with-u-s-air-force-over-satellite-contracts/feed/2Elon Musk: Tesla can make a few million cars a year by 2025https://gigaom.com/2015/01/13/elon-musk-tesla-can-make-a-few-million-cars-a-year-by-2025/
https://gigaom.com/2015/01/13/elon-musk-tesla-can-make-a-few-million-cars-a-year-by-2025/#commentsTue, 13 Jan 2015 22:31:25 +0000http://gigaom.com/?p=906344Electric car company Tesla’s stated long-term goal has been to make 500,000 electric cars a year by 2020, but on Tuesday at the Detroit Auto Show, Tesla CEO Elon Musk raised the bar even higher. He said in an onstage Q&A, (live blogged by the Verge), that he thinks Tesla can make a few millions cars a year by 2025.
[blockquote person=”” attribution=””]
“We’re going to keep driving our volume as high as we can because our goal is fundamentally to transition the world to electric cars.”[/blockquote]

Elon Musk, CEO of Tesla, unveils the dual engine chassis of the new Tesla ‘D’ model at the Hawthorne Airport October 09, 2014 in Hawthorne, California. (Photo by Kevork Djansezian/Getty Images)

In [company]Tesla[/company]’s most recent earnings, the company was estimating that it would ship about 33,000 vehicles in 2014, and that’s with selling the Model S only. Tesla’s Model X goes on sale later this year, and down the road its third car, the Model 3, will launch as well.

Musk told the interviewer that by 2020, with the Model 3 on the market and with 500,000 cars sold, it will be a safe bet that Tesla will start turning a profit. Musk said to make the Model 3 work, economically, Tesla has to make everything with the car cost about half as much.

]]>https://gigaom.com/2015/01/13/elon-musk-tesla-can-make-a-few-million-cars-a-year-by-2025/feed/2SpaceX reusable rocket test abortedhttps://gigaom.com/2015/01/06/spacex-reusable-rocket-test-aborted/
https://gigaom.com/2015/01/06/spacex-reusable-rocket-test-aborted/#commentsTue, 06 Jan 2015 11:32:07 +0000http://gigaom.com/?p=904444A Tuesday test of SpaceX’s reusable launch system was aborted at the last minute due to a problem with the Falcon 9 rocket’s second stage. Multistage rockets shed stages as they climb, to lighten the load by detaching segments whose fuel has burned out, and to clear the way for different types of motors that are suited to various atmospheric conditions. The SpaceX system’s stages are being designed to find their way back down to Earth’s surface for reuse as soon as a few hours later, which could drastically reduce the cost of space travel. Tuesday’s would have been the first test for bringing down the first stage on a solid surface. It may now be conducted as soon as Friday.
]]>https://gigaom.com/2015/01/06/spacex-reusable-rocket-test-aborted/feed/1Coming in 2015: A better Tesla Roadsterhttps://gigaom.com/2014/12/29/coming-in-2015-a-better-tesla-roadster/
https://gigaom.com/2014/12/29/coming-in-2015-a-better-tesla-roadster/#commentsMon, 29 Dec 2014 16:53:32 +0000http://gigaom.com/?p=903030Tesla’s first electric car, the Roadster, might have been a pioneer back when it was launched in 2008, but it was also a flawed beast and was produced in limited numbers (about 2,500) for a reason. The car was built on a Lotus body and used a third party powertrain from AC Propulsion, and Tesla CEO Elon Musk has said that in hindsight the company should have just built an original car from the ground up, like they did with its second car, the Model S.

But now Tesla is rewarding its early Roadster customers (who were pretty patient with Tesla waiting through many delays) with some of what it’s learned while making the Model S. The day after Christmas, Tesla announced via a blog post that it will be upgrading the Roadsters out there with new batteries that have 30 percent more energy than the older Roadster batteries, new software upgrades to lower the car’s drag coefficient and more efficient tires.

Altogether the upgrades will be able to deliver the “Roadster 3.0” a 40 to 50 percent boost to its range over the original Roadster, which was around 200 miles. Tesla said under some very specific driving conditions it can push Roadster 3.0 up to a 400 mile range. Tesla said it will be taking appointments to do the upgrade in the Spring of 2015.

We’re wondering if Tesla still plans to launch a totally new Roadster design, using a newly designed body, like the company has been reportedly planning to do. Obviously that’s not coming in 2014, like previous reports suggested. Tesla has a lot on its plate getting the delayed Model X out there door, and working hard designing the Model 3, its lower cost, third car.

]]>https://gigaom.com/2014/12/29/coming-in-2015-a-better-tesla-roadster/feed/3My 14 favorite energy stories of 2014https://gigaom.com/2014/12/29/my-14-favorite-energy-stories-of-2014/
https://gigaom.com/2014/12/29/my-14-favorite-energy-stories-of-2014/#commentsMon, 29 Dec 2014 13:00:28 +0000http://gigaom.com/?p=902842While the rest of the tech world focuses on things like Apple’s upcoming gadgets, which retailer is the latest to get hacked, or the ongoing drama around Uber, I’ve spent much of the past year (the past seven years, actually) looking at what’s going on at the forefront of energy innovation. Progress with energy — making it cleaner, more efficient and more accessible — can come in a variety of places, from university labs, within Silicon Valley startups, at big corporations, and even via government programs.

In 2014, there seemed to be resurgence of startups and entrepreneurs taking risks and daring to tackle the difficult world of energy. Perhaps they were inspired by the successes of Tesla CEO and SolarCity Chairman Elon Musk, or the Opower founders, who saw their energy data startup go public this year. Or maybe there was just a little bit more funding available to these types of strategic thinkers, after a couple years of political backlash in the U.S. and a backpedaling from energy investing by venture capitalists.

Looking back at the year, I think it’s one of the brightest ones we’ve had in awhile when it comes to the changing face of energy, using new technologies and new business models. Here were my favorite 14 stories, in chronological order, that I covered this year:

1. What 60 Minutes got right and wrong in its story on cleantech: The year kicked off with one of the most high profile — and most negative stories — to appear about the whole cleantech phenomenon in the long form television show 60 Minutes. While a lot of my peers rejected the coverage out right, I thought the producers got some things right (the VC cleantech crash angle), and some things pretty wrong (the politics and missing the solar panel boom).

Vinod Khosla – Founder, Khosla Ventures

2. The Hoover Dam of solar is now live in the desert of California, and why it’s important: The huge solar thermal plant Ivanpah was finally finished and started distributing electricity in early 2014. The project was one that highlighted the difficulties it takes to get a project like this built — it faced many delays, criticism from environmental groups (over desert tortoises), and also changing economics, as the cost of solar panels dropped dramatically as it was getting built (it doesn’t use panels, but mirrors to concentrate the sun). But the project also showed how the Department of Energy’s support of Ivanpah was crucial for it to get built, how a startup like BrightSource can innovate, and how companies like NRG and Google are eager to invest in clean energy.

A look at the heliostats and 2 of the 3 towers of Ivanpah. Taken from the 6th floor of the Unit 1 tower.

4. It’s easy to miss the meaningful parts of the Valley, if you ignore them: I went on a bit of a kick in the spring of this year, fighting back on the notion that the Valley doesn’t create anything meaningful anymore. Anyone who has followed the rise and fall of cleantech or is interested in energy innovation knows this isn’t true. A lot of times these Valley innovators are working on less sexy problems (so the media ignores them), and their innovations are taking longer to come to fruition.

Bloom Energy fuel cells.

5. As KiOR Crashes, it’s another cautionary tale for energy innovation: KiOR has always been a symbolic company for me when I think about some of the more unusual strategies that cleantech venture capitalists have taken around energy over the years. The company, which was largely owned by Khosla Ventures as well as Vinod Khosla personally, went public in the summer of 2011 at $15 per share, making Khosla Ventures’ share worth about $830 million at the time. But at the beginning of 2014 it was starting to falter, and by the end of the year it had filed for bankruptcy. I covered these guys from launch (first I heard of them was 2007) to the end.

One of Kior’s facilities. Image courtesy of Kior.

6. With Opower’s IPO, founders show meaningful tech can pay off: I was pretty excited to see Opower IPO in the Summer of 2014, and see that the company’s founders still held considerable equity at the time. Now Opower’s founders and longtime friends Alex Laskey and Dan Yates are the poster children for the growing meaningful tech movement.

Opower executives at the New York Stock Exchange ringing the closing bell.

7. As solar panels boom, it was the simple business model that the big energy players missed: While this wasn’t a huge story, I liked it because it shows that even in the difficult energy space there are things that entrepreneurs and innovators can do that big companies miss. Both NRG and GE lamented that they didn’t get in earlier into the solar-as-a-service financing business for rooftops that SunEdison started and companies like SolarCity are now dominating.

8. An almond farm and a “big ass battery” show the future of energy in California: I visited the site of this flow battery in the little city of Turlock in the Spring of 2014. It stuck out in my mind because it shows how a really small company like EnerVault can use a tiny grant, and a lot of strategic thinking, to get entirely new energy technology built in very specific places for specific use cases. In this case, the battery is installed on an almond farm, and it bottles up energy from solar panels that help power an irrigation pump that waters about 300 acres of the farm.

EnerVault’s battery on an almond farm in Turlock, California.

9. We don’t need solar roadways, we need to help unleash current solar panels: This story makes me laugh because there was SO much attention on it: 204 comments, some pretty interesting, some total garbage. Most of my peers in the energy tech sector (or covering it) I think agreed with my assessment, but didn’t want to come out and say it directly. After this was published, there were a variety of take-down articles written. Most people interested in sustainability are pretty nice and don’t want to come down on someone else’s project.

But a lot of readers out there across America did NOT like or agree with my opinion of solar roadways. Only time will really tell with these things, so I guess I’ll just have to review where the solar roadways project is in the spring.

10. Behind the scenes with Tom Siebel, C3 and its data engine for the power grid: C3 has gotten a lot of flack over the years because it pivoted substantially early on away from carbon software and to energy data analytics for utilities. But I don’t think anyone should count C3 or Tom Siebel out just because their product has been a long time coming. Siebel is one of the world’s best salesmen, he’s all in on energy data, and the company has secured a large amount of customers in a short time frame. While this wasn’t one of the most popular articles, I thought it was a fun one.

12. Behind the scenes of Aquion Energy’s battery factory & the future of solar storage: It’s exciting when startups that have been talking about a technology for years finally get to the point of commercially making and shipping it. I got a chance to check out Aquion Energy’s battery factory outside of Pittsburgh over the summer. It was still small, but represents a big leap for startups building the next-generation of grid batteries.

13. The changing face of Reno: Why the ‘world’s biggest little city’ is attracting Apple & Tesla: Before Tesla announced that it planned to build its battery factory just outside of Reno, I took a trip up there and checked out the rumored Tesla factory site, as well as Apple’s yet-to-be-built-out solar farm up there. I also met with a variety of Reno officials as well as geothermal industry execs, who were in town for a conference. Reno, which has long been a gambling backwater, is slowly transforming into a high tech manufacturing hub, and Tesla’s factory will only accelerate that.

The Tahoe Reno Industrial Center. Photo by Katie Fehrenbacher/Gigaom

14. Lithium, the Salton Sea and a startup that’s trying to change the game: The Salton Sea is such a bizarre and fascinating place that any company trying to build something new out there would be interesting. But Simbol Materials turns heads because the startup is looking to recover lithium from geothermal plants, and it’s backed by Silicon Valley investors. I drove down to the Salton Sea in September and took a tour of Simbol’s demonstration plant in Calipatria, California.

Musk has long talked about how Tesla wants to offer battery swapping options at its Super Charger stations. Battery swapping can take just a few minutes — shorter than the time it takes to pump a car with gasoline, says Musk — while fast charging can take at least a half hour or more. Tesla baked a swapping option into the design of the Model S from the beginning, just in case this turned out to be an important energy option.

[vimeo 68832891 w=500 h=281]

In the Summer of 2013 Tesla demoed how the battery swapping tech would work: a Tesla car drives over a swap station, and a robotic arm (the same tech that is used on the factory floor in Fremont) swiftly reaches up and turns the bolts on the bottom of the car. Then the discharged pack is automatically removed and replaced with a fully charged pack.

The big question in my mind is not around technology, but price and value to the customer. Since Tesla customers own their own batteries, how would they get them back or get a battery with the same type of use?

A Better Place battery swap station.

According to a report in Forbes that was published around the time that Tesla demoed the swapping tech, a swap could cost around the “price of about 15 gallons of gas at the going local rate.” If a customer plans a return trip they could do another swap on the way back for the same price and get the fully charged battery back again. If a Tesla customer is driving one-way (and not back through the swap station later), Tesla could bill them for the difference in value, or transport the old pack back to the customer at a charge. Each battery swap station will cost $500,000 to build.

Battery swapping isn’t a new idea and a lot of people think this could be an important option for electric cars one day. Better Place is the most famous company to try to tackle battery swapping, but unfortunately the company wasn’t able to execute on that vision and filed for bankruptcy after failing to sign up enough customers to buy its cars and use its infrastructure.

Updated at 11:32 AM on Friday December 19th, with more info on the battery swap pilot from a Tesla blog post.

]]>https://gigaom.com/2014/12/19/elon-musk-tesla-battery-swap-now-working-in-beta-in-california/feed/3Five reasons why Tesla’s stock is downhttps://gigaom.com/2014/12/05/five-reasons-why-teslas-stock-is-down/
https://gigaom.com/2014/12/05/five-reasons-why-teslas-stock-is-down/#commentsFri, 05 Dec 2014 18:54:36 +0000http://gigaom.com/?p=898404Electric car company Tesla Motors has seen its stock drop pretty significantly over the last three months. From a high of more than $291 on September 4, to its current trading price of around $223 Friday, Tesla has lost more than 20 percent of its value over three months.

This is not necessarily cause for too much alarm. The stock has always been a bit volatile and many stock owners believe in Tesla’s long-term value over its short-term value. But to help explain why the stock has sputtered, here are five reasons it’s been down recently:

Tesla owners take a ride in the new Tesla “D” model electric sedan after Elon Musk, CEO of Tesla, unveiled the dual engine chassis of the new Tesla ‘D’ model, a faster and all-wheel-drive version of the Model S electric sedan, at the Hawthorne Airport October 09, 2014 in Hawthorne, California. (Photo by Kevork Djansezian/Getty Images)

1. Tesla’s stock has been overvalued. For the volumes that Tesla produces, and for the early stage of its life, Tesla’s stock has been significantly overvalued over the past two years. From its IPO at $17 per share in 2010, the stock has risen more than 1,400 percent to reach that high in September 2014.

Tesla CEO Elon Musk has acknowledged this repeatedly over the past year, most recently at a news conference in September right after he announced that Nevada would get the battery factory. Musk said at the time, “I think our stock price is kind of high right now … If you care about the long term, Tesla, I think the stock is a good price. If you look at the short term, it is less clear.”

A recently raised spot of land in the Tahoe-Reno Industrial Center

2. Battery factory is a sizable risk. While Tesla’s huge battery factory has been the subject of breathless media attention, there’s actually a lot of risk involved with setting up such a massive factory and meeting battery production and cost expectations on time and budget.

That’s partly because of the sheer size of the factory, but also because it will be a sort of industrial park under one roof, where Tesla will work with Panasonic and various other companies that will make the batteries’ anodes, cathodes, and separators. Tesla will produce the battery packs and be the landlord, but will be coordinating with the other companies in its space. Working closely with suppliers in this way could take time to get right.

However, the reality is that Tesla would not be able to make its third-generation car at the price it wants and in the way it wants if it didn’t build this factory. Tesla and Elon Musk are “leaning in” to the battery problem, so to speak, adding more risk, instead of looking to mitigate risk to solve the issue.

Tesla factory floor.

3. Tesla growing pains: For all that Tesla has achieved, it has had some growing pains over the past few months as it tries to ramp up production of the Model S and move closer to launch of its next cars.

Tesla has delayed the launch of the Model X many times, most recently in its last earnings on November 5. It also revealed that it wasn’t able to ramp up production of the Model S as quickly as it had expected during the third quarter, so it was going to miss its annual production guidance for the year.

Growing pains are to be expected for a small car company trying to transition into a much bigger one. But I would expect these little speed bumps to sway the stock in the short term.

Tesla CEO Elon Musk launches the Tesla D.

4. The D underwhelmed. While the Tesla D — the souped-up dual-motor, all-wheel-drive version of the Model S that can go zero to 60 in just over three seconds — is undoubtedly cool, Tesla’s stock slumped immediately after its launch in early October. I think stock watchers were used to more disruptive and buzzy technologies out of Tesla, like the Model X with its eye-popping new doors, or Tesla’s hyped-up super charger-network. To me, the D indicates that Tesla wants to monetize its current Model S platform even more, now that the Model X is delayed. Will the third-gen car be delayed as well?

One of several Volts on the floor at a conference in 2012.

5. Growing competition. While there aren’t many companies that are effectively competing against Tesla’s Model S category right now, car companies continue to launch new models that could be more competitive in the future. GM is launching its next-generation Volt next year, and the original Volt is the bestselling electric car in the U.S. in total over time, with 70,531 units sold to date. Toyota and Honda plan to launch new fuel cell electric cars next year. BMW is trying to become more competitive after the launch of its i3. Nissan has done pretty well with its LEAF electric car, but it’s a shorter range, cheaper, urban car, compared to the Model S.

]]>https://gigaom.com/2014/12/05/five-reasons-why-teslas-stock-is-down/feed/14Is it boom time ahead (again) for solar panel manufacturing?https://gigaom.com/2014/11/07/is-it-boom-time-ahead-again-for-solar-panel-manufacturing/
https://gigaom.com/2014/11/07/is-it-boom-time-ahead-again-for-solar-panel-manufacturing/#commentsFri, 07 Nov 2014 15:38:59 +0000http://gigaom.com/?p=886987The solar industry is in expansion mode, again. First Solar (s FSRL) — the U.S. maker of thin solar panels, which is seen as a bellwether for the industry — said this week that they plan to boost their solar panel production by as much as 46 percent in 2015.

SolarCity, the solar installer founded by Elon Musk’s cousins the Rive brothers, is building its first solar panel factory in New York and expects to roughly double the amount of solar installations to between 920MW to 1,000MW in 2015, company executives said this week during a call with analysts to discuss its third-quarter earnings.

Seems like the boom is back! Or is it?

For those who follow the solar market, that decision by First Solar is remarkable. It was only two years ago that the company — and the rest of the solar industry — struggled to deal with a growing global market that produced way more solar panels than it needed.

Arizona-based First Solar is looking at building new, and restarting or improving existing production lines, in 2015 because it expects more business in the next two years, said First Solar CEO, Jim Hughes, while discussing the company’s third-quarter earnings with analysts. The company also develops power projects and is building hundreds of megawatts worth of solar farms in California alone.

The growth will not only come from First Solar’s foray into markets outside of the U.S. but also the within their home turf, where the end of a 30 percent federal investment tax credit at the end of 2016 is prompting solar project builders try to beat that deadline.

The investment tax credit has driven much of the solar market growth in the U.S. Power project investors, including homeowners who purchase instead of lease their solar panels, could take 30 percent of the cost of a project off their income taxes. That tax credit is set to disappear after Dec. 31, 2016 for homeowners and drop to 10 percent for other types of projects.

The U.S. market has been among the top three big-growth markets worldwide. Solar panel installations in the country will likely grow 36 percent to reach 6.5 gigawatts in 2014, said GTM Research.

The Solar Energy Industries Association, a grade group, is gearing up for a big campaign to get Congress to extend the tax credit. With Republicans retaking control of the Senate and retaining its majority status in the House, solar companies might face a tougher lobbying effort ahead.

Without a clear signal from lawmakers that the tax credit as it exists will live beyond 2016, developers and investors understandably would feel the pressure to hurry up and get their projects done or at least underway in order to qualify to claim the credit. The same rush-rush mentality has happened many times before in the U.S. and in previously hot solar markets such as Spain and Italy (as well as in the wind industry over the years).

The potential loss of the tax credit has driven SolarCity and others to focus on cutting their project development and construction costs. The goal is to make the price of solar electricity on par with power from coal or natural gas power plants without the hefty government incentive. Reaching that goal will allow solar companies to continue to tell consumers that they could end up paying less for electricity over time if they go solar. It also will entice more business and utility customers to sign up.

Reducing manufacturing and project development and construction costs is also critical for First Solar to stay competitive. For several years now, the company has also been focusing on winning customers in emerging markets, such as India and, more recently, Chile. Earlier this week, it announced the groundbreaking of a 46-megawatt project in the United Kingdom.

The company has previously fumbled in its international expansion. Its effort to build 2 gigawatts of power projects in China’s Inner Mongolia was declared dead earlier this year.

Hughes said he recently hired a new manager to work on developing the Chinese market. But China will not be a priority in the near term partly because profits tend to be thin for projects there.

While First Solar plans to boost production to meet anticipated demand, it’s being cautious about firing up too many assembly lines to contribute to another glut in the market.

“There’s quite a lot of capacity being added in the marketplace right now,” Hughes said. “You’ll continue to see a bit of imbalance of supply and demand. We are cautious about not heading into another period of excess capacity.”